Food inflation slips to 8.06 pc, non-food items remain

New Delhi, Jun 2 (PTI) In India, Food inflation fell
marginally to 8.06 per cent during the week ended May 21, but
the rate of price rise of non-food items continued to remain
above 20 per cent, driven mainly by the increase in price of
petrol last month.
The government said it expects inflation to moderate in
the coming weeks, but cautioned against uncertainty over oil
prices in the international market.
"... If the declining trend in food items and non-food
primary items articles continues, then perhaps it will be
possible to have a moderate rate of inflation," Finance
Minister Pranab Mukherjee said.
While inflation of food items, as measured by the
Wholesale Price Index (WPI), fell to 8.06 per cent during the
week under review from 8.55 per cent in the previous week,
non-food primary articles registered inflation of 21.31 per
cent, as against 23.22 per cent.
Inflation of fuel items, however, increased to 12.54 per
cent from 21.11 per cent in the previous week, mainly on
account of an over 32 per cent jump in the index for petrol.
The oil marketing companies increased the price of petrol by
over Rs 5 per litre from May 15.
The fall in food inflation numbers is basically on
account of decline in prices of pulses, wheat and vegetables.
"The important figure is the non-food WPI. There is
practically a two percentage point decrease from 23.22 per
cent to 21.31 per cent (in it). My comment is that there will
be a moderation on inflation," Mukherjee said.
He said the decline is evident in overall primary
articles as well.
Overall, inflation in primary articles rates stood at
10.87 per cent during the week under review as against 11.60
per cent in the previous week.
Mukherjee, however, added that uncertainty still prevails
in respect of fuel prices.
Global crude prices are currently above USD 100 per
barrel, mainly on account of conflict in the Middle East and
North Africa.
After the hike in petrol prices, the retail rates of
diesel and LPG are also expected to be hiked very soon and
this will also get reflected in the inflation data over time.
The Finance Minister called for a look at the broader
picture, instead of regular inflation figures.
On the other hand, experts said the decline may be
temporary and caution is required.
"The numbers have shown some improvement, but it is too
early to say that inflation will fall in the coming months,"
financial services firm KASSA director Siddharth Shankar said.
He added that the full impact of fuel price hike could
take some more time to become visible.
As per data released by government today, prices of
pulses were down by 9.22 per cent year-on-year, while wheat
became cheaper by 0.77 per cent.
This seems to be on account of record production of wheat
and pulses during the 2010-11 crop year (July-June).
During the week under review, prices of vegetables
overall were down by 1.06 per cent on an annual basis, while
potatoes became cheaper by 2.15 per cent.
However, prices of other food items became more
expensive. Fruits were up by 30.51 per cent and onions by
12.32 per cent year-on-year.